Friday, September 23, 2011

Courthouse News in an article about the Wikileaks cables from the U.S. Embassy in Ecuador revealed Chevron's hypocrisy in accusing the Ecuadorians of "conspiring" with Ecuadorian government officials in the long-running legal battle in the Amazon rainforest. Seems Chevron was "conspiring" with the U.S. Embassy. In his closing, legal reporter Adam Klasfeld reminds readers that even the highly-prejudiced Federal Judge Lewis Kaplan recognized that Chevron does not have "clean" hands. The surfacing of the Wikileaks' cables comes on the heels of a 2nd Circuit Court of Appeals decision that rebuked Kaplan in his effort to block the Ecuadorians from enforcing their $18 billion judgment in Ecuador.

"Chevron tried to shake off multibillion environmental claims in Ecuador by lobbying government officials, even as it blasted opponents for allegedly playing to the courts' corrupt and political side, according to diplomatic cables released by Wikileaks…."

".... in a cable to the U.S. secretary of state, former U.S. Ambassador Linda Jewell wrote that Chevron had begun to "quietly explore" a deal with the government of Ecuador (GOE) to make the case disappear. (The cable read:) 'Chevron had begun to quietly explore with senior GOE officials whether it could implement a series of social projects in the concession area in exchange for GOE support for ending the case, but now that the expert has released a huge estimate for alleged damage, it might be hard for the GOE to go that route, even if it has the ability to bring the case to a close,' Jewell wrote on April 7, 2008…."

"....The Wikileaks cables also show that Chevron did not always have misgivings about the Ecuadorean courts. One rallying cry Chevron has used to undermine the Lago Agrio trial is a video that allegedly implicates the presiding judge, Juan Nuñez, in $3 million bribery scheme. Chevron has claimed it received videos unsolicited and published them over the Internet on Aug. 31, 2008….

"Two days after Chevron published the Nuñez footage, then-U.S. Ambassador Heather Hodges sent a cable to the secretary reporting that Chevron lawyers phoned the Embassy to give diplomats a 'heads up' about the disclosure. Ecuador ultimately expelled Hodges this past April for disclosures she made in unrelated cables obtained by Wikileaks. While denying wrongdoing, Nuñez stepped down from the case to avoid the appearance of impropriety. But cracks quickly surfaced in Chevron's allegations. Summarizing hours of footage, The New York Times later reported, 'No bribes were shown on the tapes.'"

"Hodges explained in the cable that the 'tapes were recorded clandestinely by Diego Borja, an Ecuadorian who had performed work for Chevron as a logistics contractor, and Wayne Hansen, a U.S. citizen with no ties to Chevron.' Although Chevron has distanced itself from the cameramen, Courthouse News discovered emails currently under a court seal that show Hansen contacted the company's investigator months before the release of the videos. Hansen claimed in the email that Chevron duped him, and he threatened to ask Judge Nuñez for forgiveness if the company did not contact him."

"More than a year later, he sent another email to Borja's investigative firm. Hansen claimed that he was in Peru, to which he had apparently fled in defiance of a subpoena that would compel an explanation of the videos. Hodges, the ambassador, told Washington that Ecuadorean government officials were immediately skeptical and indignant about the recordings….."

".... In a follow-up cable sent about a week later, Hodges said that Ecuador's prosecutor general called on the (U.S.) attorney general to 'initiate proceedings against Chevron in the United States, presumably for violations under the Foreign Corrupt Practices Act.' The Ecuadorean government has not backed off from allegations that Chevron orchestrated a 'judicial entrapment' scheme, and it continues to ask a U.S. federal judge to unseal the Borja and Hansen communications."

"In one of the first discovery proceedings Chevron initiated last year in New York, U.S. District Judge Lewis Kaplan interrupted counsel for the Ecuadoreans as the lawyer assailed Chevron's litigation strategy.

'I am not naive,' Kaplan said. 'I don't assume that anyone's hands in this are clean.'"

Wednesday, September 21, 2011

Earlier this week, the Second Circuit Court of Appeals affirmed what the Ecuadorians have said all along: Chevron has abused not only the laws in Ecuador but in its own country, and Federal Judge Lewis Kaplan jumped the gun in issuing a preliminary injunction against enforcement of the $18 billion judgment the Ecuadorians sought and won.

Han Shan of Amazon Watch captured the emotions of the day best in his blog here:

Yesterday, a 3-judge panel from the 2nd Circuit Court of Appeals dealt a stunning blow to Chevron's abusive and deceitful efforts to evade accountability for its oil disaster in Ecuador.

The appeals court threw out U.S. District Court Judge Lewis Kaplan's injunction that purported to prohibit the Ecuadorian plaintiffs from enforcing the $18 billion judgment against Chevron delivered by an Ecuadorian court in February. It also indefinitely stayed a trial that Judge Kaplan had scheduled for November over a preposterous countersuit filed in his court against the Ecuadorians and their attorneys, at which Chevron hoped to have the Ecuadorian verdict against the company declared unenforceable. The preliminary order from the 2nd Circuit came just one business day after a hearing before the panel on Friday, Sept. 16th, and said that a full ruling looking at the various issues will come "in due course."

Amazon Watch founder and Executive Director Atossa Soltani appears on Democracy Now! with Amy Goodman to discuss the implications of the Ecuadorian plaintiffs' victory in the appeals court.

Monday's stunning two-page order from the panel gave the Ecuadorean plaintiffs their first victory in two years of battling in New York's federal courts. But it was a huge win.

The appeals court order constitutes a harsh rebuke to Judge Kaplan's over-reach in the case, making him Chevron's most valuable legal asset in the company's dirty fight to avoid responsibility for its pollution in Ecuador. The appeals panel didn't remove Judge Kaplan, as requested by the Ecuadorian plaintiffs, but as Marco Simons, legal director for EarthRights International writes on his blog:

"... the appeals court declined to remove Judge Kaplan, who the Ecuadorians believe is biased against them, from the case. But it's possible that, after the court issues its opinion, there won't be any case left for Kaplan to preside over."

The ruling also dealt a humiliating rebuke to the strategy driven by outside law firm Gibson Dunn, and Crutcher law firm and lead counsel Randy Mastro, who was literally laughed out of court at the hearing which led to the order.

After attending hearing after hearing at which Mastro made sweeping fraud and conspiracy allegations against the Ecuadorians and their lawyers supported by the flimsiest of fantasy, theory, and conjecture, it was truly a breath of fresh air for this author to watch the Gibson Dunn lawyer wither at questions from the appellate panel based in logic, common sense, and the rule of law.

"We can now at least dream there will be justice and compensation for the damage, the environmental crime, committed by Chevron in Ecuador."

More than anything, the order from the appeals court represents the most stinging rebuke to the arrogant and deceitful strategy employed by the cabal of lawyers, spinmasters, and seriously-conflicted executives running a mini Orwellian empire within the company devoted to characterizing the Ecuadorian plaintiffs as criminals, and painting the company that poisoned them as victims. They thought overwhelming evidence of the company's crimes in Ecuador could be beaten back with shameless cynicism and an astonishing outlay of cash.

Even 2nd Circuit appeals court Judge Richard Wesley wondered aloud how much money had been spent by Chevron to pursue its legal strategy, and at what cost to shareholders.

Regulators, politicians, institutional investors, and shareholders who have heard Chevron management deny that the company faces any significant liability in Ecuador are going to be asking the most difficult questions that Chevron's lawyers and leadership (if one can call it that) have yet heard, now that the 2nd Circuit has affirmed the rule of law over Chevron's deceptive sensationalism.

Will Chevron management "face reality" as New York State Comptroller Thomas DiNapoli—trustee of the New York State's Pension Fund with $780 million in Chevron stock—demanded during this past May's Chevron shareholder meeting? Or will CEO John Watson, architect of Chevron's takeover of Texaco and the company's toxic legacy in Ecuador, and other senior management allow the entire company to be driven off a cliff by outside lawyers who have no interest in ending a legal saga that continues to line their pockets?

Secoya indigenous leader Humberto Piaguaje (L) and campesino communtiy leader Servio Curipoma (R)—who have both worked tirelessly to demand justice from Chevron—outside of a courthouse in New York on Sept. 16.

Either way, this decision brings the people of the Ecuadorian Amazon one step closer to justice, and we call on Chevron's management to do the right thing by meeting the company's moral, legal and fiduciary obligations to clean up its contamination in Ecuador. Of course, justice delayed is justice denied, and the men, women, and children of the Ecuadorian Amazon have suffered for far too long already.

Monday, September 12, 2011

This DeSmogBlog post clearly shows how Chevron is misleading, if not downright lying, to U.S. courts about pressuring Ecuador's government and the U.S. Embassy in Ecuador to halt a lawsuit, filed by five indigenous groups against the oil giant for massive oil contamination in their Amazon rainforest homeland. Chevron has accused the Ecuadorians suing the company of inappropriate interactions with Ecuadorian government officials, while denying its own. More to come on this issue.

New documents uncovered in the ongoing legal battle over Chevron/Texaco’s destruction of the Ecuadorian rainforest show that, while Chevron recently labeled the guilty verdict and $18 billion fine leveled against its Texaco unit by an Ecuadorian court as “illegitimate and unenforceable,” it was in fact the oil company that lobbied fiercely to have the case moved out of U.S.courts to the Ecuadorian justice system.

DeSmogBlog has reviewed corporate memos, letters and records of meetings documenting the oil giant’s efforts to have the case moved from New York - where it was originally filed by the plaintiffs - to Ecuador, where the company hoped to use its influential connections within the government at the time to have the case dismissed.

Further, Chevron’s accusation that the plaintiffs conspired with Ecuadorian judicial and government officials is quizzical in light of the documents revealing that, in fact, it was the oil company’s representatives who held ethically questionable meetings with government officials.

While the plaintiffs in the case did meet with Ecuadorian government officials, they did so to report a crime - the falsification of a remediation agreement based on test samples taken at the so-called “remediated” sites during the trial.

The oil company’s secretive meetings with the Ecuadorian government served an entirely different purpose. The documents appear to indicate the company’s potentially corrupt tampering with international negotiations between the U.S.and Ecuador over which country’s justice system was the correct venue for hearing the case.

From 1993 until the case was moved to Ecuador in 2002, Chevron argued aggressively in U.S. courts that Ecuador was the preferred forum for the suit because the pollution occurred there. It was the plaintiffs who first contended that the case should be heard in New York, where Texaco was headquartered, and away from the possible corruption in Ecuador.

Historically, the oil industry has had a tight grip on Latin American governments, enjoying immense control over their own destiny. Wheels were greased with bribes, and government officials were loyal to the companies’ interests. Ecuador’s government was not immune to this oil industry influence, as the documents reveal.

For example, a 1993 letter addressed to the State Department from the Ecuadorian ambassador to the United States was written with the help of Texaco government affairs official Michael Kostiw (who happens to be a former CIA operative dubbed “Bacon Guy” by the Washington Post for his infamous exit from the agency over the theft of a package of bacon, shortly before he was hired by Chevron).

The hypocrisy of that statement is now stunning in the wake of Chevron’s reaction to the guilty verdict handed down recently by a competent Ecuadorian judge who originally fined the company some $8 billion for its destruction of the rainforest and local communities, an amount that later rose to over $18 billion due to Chevron’s failure to acknowledge and apologize for its pollution. Instead, Chevron immediately labeled the judgment “illegitimate and unenforceable” and seemed to suggest that Ecuador had committed “fraud” by leveling the guilty verdict against Texaco.

“The top priority… must be to protect Texaco, Inc., from the lawsuit in US courts.To the extent that your [Chevron’s] litigators believe that an amicus brief by the [government of Ecuador] will be helpful to their efforts, we should first focus on getting that back on track.

This can be done by working with certain opinion leaders in Ecuador to explain the implications of the law suit for investments in Ecuador.”The memos also reveal some hints of the corruption among Ecuadorian officials that the oil company would later hope to leverage in order to derail the lawsuit. Long before the company’s lobbying efforts succeeded in winning a change of venue and shifting jurisdiction over the trial from New York to Ecuador – the company had identified allies in key positions of the Ecuadorian government ready to act in the company’s best interests.

A 1993 memo from Texaco consultant Holwill & Company details the lobbyists’ meeting with the Ecuadorian Minister of Energy, who told them he had “been tough on the company” in a press conference, but he then “winked” and said “it’s all politics.”

The memo goes on to reveal that the Minister of Energy had offered the job of sub-secretary for the environment to a former Texaco employee – “a post important to Texaco.”

A separate 1993 memo relays the results of an “extremely productive and cordial”meeting between Texaco officials and Ecuador’s Vice President at the time, Alberto Dahik, about efforts to reach a financial agreement with the Ecuadorian government to drop the government’s claims over the pollution. The memo reveals many instances in which Dahik went out of his way to help Texaco resolve the dispute quickly in order to keep the company interested in investing further in Ecuador, including at a fast-approaching round of oil leases.

“Dahik stressed again his desire to resolve the matter and to encourage additional investment in Ecuador by Texaco.…the resolution of the fiscal issues would permit the company to participate in the Seventh Round of Oil Leases. … (Comment: Dahik seemed as interested in touting Texaco’s interest publicly as he was in Texaco actually making new investments.)”

The memo author gloats on more than one occasion at the ease with which the company’s requests were handled by the vice president, who went around key ministers who might have objected, dealing with lower level staff to help the company.

“We felt that it was significant that Dahik by-passed finance minister Robalin and called a third level official instead…”

During the course of two decades of fossil fuel extraction and drilling activities, Texaco contaminated huge swatches of rainforest, displacing native peoples, threatening water supplies and public health and permanently altering the delicate jungle ecosystems that supported the indigenous population’s culture and way of life. What remains of the proud local population faces a legacy of cancer and other health maladies. They must also endure Chevron’s condescending assurances that their health problems are due to their poverty and lack of sanitation – as if they hadn’t coexisted with the land in fine health prior to the oilmen’s arrival.

As those who have seen the documentary Crude understand, there is no question that Petroecuador – which assumed some of the oil operations left behind when Texaco bailed from Ecuador in 1991 – is guilty of its own share of pollution and malfeasance, but Chevron’s attempts to hide behind the “consortium” that it built with the state-owned gas company are disingenuous.

Chevron’s culpability for its legacy of pollution is as clear as the rainwater the people now rely on for drinking and cooking since they can no longer safely use the contaminated groundwater and river water that supported their civilization prior to the oil company’s arrival.

Chevron should accept the Ecuadorian court’s verdict and apologize to the people of Ecuador. But instead, the company will appeal, delay and deny responsibility until there are no victims left standing. With the oil industry, “it’s all politics.”